What Is Performance Management?

Harvard Business Review’s HBR Guide to Performance Management tells us “Performance management is an interconnected set of tools used to measure and improve the effectiveness of people in the workplace. High-performing organizations use performance management to achieve three goals: to develop individuals’ skills and capabilities, to reward all employees equitably, and to drive overall organizational performance.”

These definitions are interesting because although they all cover the same basic ground—employees performing at their best—they each take a different tack. One talks about the communication between employee and manager, the other talks about the environment, and the third, the most general, doesn’t even identify the “set of tools” it references but focuses more on the goals. It would seem, then, that this is a pretty broad topic.

Let’s settle into a working definition of performance management: Getting the most out of a team reporting to you. Doing that means setting clear expectations, aligning the team to those expectations, holding them accountable, providing feedback on their work against those expectations, and taking action based on the results of that performance (good or bad). No matter how good you are at the other parts of management, if you’re in charge of a team, this is the substantial part of your job. In fact, making your direct reports successful is arguably the most important part of the job.

Let’s break that definition down in the following sections.

Setting clear expectations#

At a fundamental level, this is the job description for the role in which the employee is operating. Regardless of what that role is—full-stack developer, test engineer, site reliability engineer, or any other related role—the job has a set of expectations to it. At a very basic or naïve level, this is the description of the job that was used when the employee applied for the role, but hopefully that’s not the only description on record someplace. We talk about this in the chapter “The Need for Clear Expectations.”

Aligning the team#

The team needs to agree to those expectations. They can either do so because they’ll be fired if they don’t (the “rule-by-fear” approach), or they can do so by “leaning in” to the idea and embracing the expectations. The alignment isn’t just a “sure, we get it” kind of agreement, however; it’s also the team realizing that they do better and accomplish more when they operate as a team, rather than as a set of individuals. (And your expectations can often help influence this by stressing the team as a whole, rather than individuals.) This alignment will not happen overnight, nor will it always remain in force once established—so be prepared to constantly nudge and correct the team to those expectations, particularly when they change. We talk about this in “The Need for Clear Expectations” and “Motivation.”

Holding the team accountable#

The word “accountable” is often mistakenly understood to mean “take the fall for” or “receive the blame.” While that may be the case in certain scenarios, the deeper issue here is that the team (and each of the individuals on the team) is taking responsibility for an outcome, for delivering on some kind of commitment. If I agree to pick up my sister from the airport, and then fail to do so, it’s reasonable for her to hold me accountable for not doing so, regardless of the reasons why; similarly, if I do show up and give her a ride, it’s reasonable for her to give me a thank-you or express appreciation for following through. Once targets have been set that are important for the business, accountability means examining the results and seeing if they measure up to what was needed to reach those targets. It also means setting targets that are important for the employee, and making sure the employees reach those targets. We talk more about this in “Accountability” and “Metrics.”

Consistently providing clear feedback#

In many respects, feedback is the centerpiece of the whole performance management discussion. It’s through feedback that you give your team hints as to how they’re doing and how to improve. (Sometimes those hints can be subtle, and sometimes they will need to be announced in bright lights with blaring trumpets and blinking neon letters.) Feedback comes in many forms, from many directions, both formal and informal—but it must be unambiguous, it must be actionable, and it must be consistently reinforced. This is discussed further in “Metrics” and “Feedback.”

Taking action based on the results#

Of course, all talk and no action very quickly ruins your credibility with your team. (Remember, credibility is currency.) Teams that receive positive feedback but no further reward will quickly find the positive feedback to be hollow and insincere. Individuals that get negative feedback that is never followed up with any sort of corrective action quickly learn that the manager is a “paper tiger”: loud but harmless. Actions must follow, regardless of the feedback. We talk about this extensively in “The Development of Talent,” “Rewards,” “Corrections,” and “Termination/Separation.”

Together, the sections of this course will give you some tools and frameworks to think about managing the performance of your team in a way that will make your team feel challenged and accountable, yet supported.

Performance reviews should never be a surprise. Without a doubt, one of the worst days at work for anyone is the “Fail-Bomb Performance Review.” You walk in feeling pretty confident, thinking you’ve done pretty well over the quarter (or year), and your boss opens with, “Well, we were pretty disappointed in your performance this year.” It’s bad enough to get the terrible review, but to get it when you were expecting the exact opposite? It’s disheartening, it decreases a person’s energy, and it often leads to an almost immediate posting of a curriculum vitae to various job boards. While the performance itself may be an indictment of the individual’s work over the last period of time, the fact that this came as a complete surprise to the employee is an indictment of the manager delivering the review. If this is the first time the employee is hearing negative feedback, the manager has not been doing the necessary coaching, correcting, and communicating over that same period of time.

Note that this is true regardless of the “feel” of the performance review. If the employee is expecting a negative review but gets a positive one, it’s just as much of a problem as the opposite scenario—it just doesn’t make the employee feel as bad. As a manager, it is imperative that your employees know—every day if necessary—just where they sit respective to the established expectations. If at any point they don’t know, that’s on you.

One thing you will probably realize, too, is that this is a constant cycle. We set goals/expectations for a period of time (typically a year and usually in alignment with the company’s fiscal year), we measure the employee’s performance against a variety of feedback mechanisms, and we provide the employee with feedback and coaching during that time. At the end of the cycle, we do a formal review and begin the cycle again.